DAX Xetra (cash index)
In the wake of Wall Street’s Powell driven rally yesterday, the DAX has begun the day on the front foot, but is this a move to signal a determined shift in outlook?
The market has been consolidating for the past few sessions under the resistance of the near to medium term pivot band 11,400/11,460 however this consolidation has now decisively broken.
This has come with what is now an improving outlook on momentum indicators.
The Stochastics are tracking higher (although arguably not decisively) whilst the MACD lines are accelerating higher and the RSI is pushing to eight week highs.
The RSI pushing decisively above 50 would be a signal to take notice of now.
However the key move for the bulls would be above this pivot band 11,400/11,460 and if this is not seen now (given the strength of the Wall Street bounce) then would this be seen as a disappointment?
- A close above 11,460 opens 11,567/11,690 highs from early November and the old key long term overhead supply 11,725/11,865 would come back into play.
- Support at 11,265 is growing and the fact that the market has barely even contemplated filling the gap at 11,205 suggests this could even be the “breakaway gap” of a decent recovery.